How Mergers & Acquisitions disrupt healthcare technology


Disruption is often cited as something positive today, but when it comes to the disruption of healthcare technology caused by mergers and acquisitions, it can be downright frustrating. Even the best technology can be paralyzed by corporate culture, so consider what happens when you’re trying to merge the corporate and technological cultures of two or even three entities.

M&A challenges are surely not limited to healthcare, but there are certain aspects of this industry that magnify the effect of marrying disparate cultures, processes and technologies. After all, healthcare is a business based on an oath of “do no harm,” and customers/patients take that oath seriously. Consumers build a different kind of brand bond with healthcare providers and insurers largely because of the incredibly intimate services they provide.

There have been more than 100 hospital or health system mergers and acquisitions each year since 2014, with a high of 115 in 2017, and according to KaufmanHall that pace is likely to continue. So think about the reassurances about these new relationships that need to be communicated to patients as well as to clinical and technology teams.

The perils of many M&A’s begin at their genesis. Healthcare executives and investors gravitate to the business aspects of such mergers at the expense of bringing in clinical stakeholders (and patient advocates) who have to actually make these mergers work.

Even under what might initially appear to be a perfect business marriage, the merging and purging of technologies can be daunting.

The most obvious is related to interoperability. Many healthcare organizations are already running more than a dozen  platforms that must communicate to deliver a single view of the patient and billing. Now add to that a new organization of a different size and scale that has few systems in common with its new sister.

Most healthcare providers already see clinical burnout as a major problem with even the most established electronic medical record systems given the demand to document value over volume of care. With the merger or acquisition comes the possibility of a totally new workflow along with what can be much more demanding documentation policies. This is yet another reason why clinicians must be brought in during the earliest negotiations stages to avoid an “if we had only known” scenario.

The merger of security platforms and cultures is perhaps the most important aspect of the newly formed entity. While such protocols as Fast Healthcare Interoperability Resources (FHIR) are not specifically security platforms, their ability to provide reliable communications across disparate platforms provides the ability to make security more transportable.

The security technology is only as good as the integration of security cultures within the healthcare workforces. We have seen many mergers where the breach prevention and reaction training were dramatically different. Having a high security culture merge with an enterprise that has not been as stringent is yet another source of disruption and burnout.

Finally, there is the marketing communications aspect of the merger. M&A occurs because executives and investors feel more financial and patient satisfaction value will be derived form the combined enterprise. Given healthcare is so incredibly intimate — in many cases literally a life and death relationship — the ability to communicate that the  strengths of both organizations will be enhanced after the merger is critical.

This must be done using an outside-in patient-driven approach as opposed to board room executives with no clinical, patient facing or technology expertise espousing the idealistic advantages for the benefit of shareholders.

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